What is Bitcoin?

Bitcoin is a digital crypto-currency with no single point of failure due to its decentralized peer-to-peer architecture. The source code is publicly available and changes to the reference Bitcoin client are made via concensus within the community. Advantages of Bitcoin include irreversible transactions (i.e. no possibility of chargebacks as with credit cards),
pseudo-anonymous, limited and fixed inflation, near instant transactions, multi-platform, no double-spend and little to no barriers to entry and more. It was created by an anonymous person known as Satoshi Nakamoto. Find out more at WeUseCoins.com.

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This morning, BTC-USD pushed a new all-time high on several exchanges. However, this time, the momentum to continue higher seems to be waning. Shortly after establishing the new all-time high, there was a $150 flash crash that sprang a series of account liquidations across several exchanges in a move that would ultimately “long squeeze” the market. A long squeeze is a term used to describe the sudden cascade of long positions getting stopped out of their positions, causing market orders to propel the price even lower:

Figure 1: BTC-USD, 5-Minute Candles, Bitfinex, Long Squeeze

The figure above shows the price movement correlated to the volume during the $150 drop. Halfway through the drop we see a sudden spike in sell volume. This spike in volume is the beginning of the “long squeeze” that initiated the cascade of market sell orders caused by traders in long positions being forced out of their positions via their stop-loss market orders.

Figure 2: BTC-USD, 15-Minute Candles, Bitfinex, Short Squeeze

Yesterday, at around 12 pm EST, the exact opposite thing happened in a market event known as a “short squeeze.” You can think of a short squeeze as literally the opposite of a long squeeze: People who are anticipating a great short entry are suddenly forced out of their positions via their stop-loss orders, and market buy orders propel the market higher, thus triggering more stop-loss orders until the market equalizes.

Today the BTC-USD market has begun a series of long squeezes that pulled the price down by $300 in a matter of hours, and it doesn’t show much sign of letting up at the moment. Let’s take a look at the macro trend and see where the market is likely heading:

Figure 3: BTC-USD, 3-Day Candles, Bitfinex

For the fifth candle in a row, the 3-day candles have managed to puncture the Bollinger Bands in a move that indicates an overbought market. We have yet to see an attempt to move within the Bollinger Bands and provide some relief for the high price range.

Zooming in a little closer, we can see that clear signs of bullish exhaustion formed as we began to push the most recent set of all-time highs:

Figure 4: BTC-USD, 2-Hour Candles, Bitfinex, Bullish Exhaustion

The first thing that pops out about this trend is the decrease in volume (shown in pink) leading into this morning’s all-time high. Upon reaching that high, sell volume began to pick up considerably (labeled in blue) and has continued to remain strong during the push into the $4300 and $4200 prices. The previous all-time highs (labeled in yellow) are currently paired with a decreasing MACD moving average/signal line trend that indicates the market is losing bullish momentum across the macro trend.

The BTC-USD market seems to be running on fumes at the moment, but I would not be surprised at all to see an all-time high squeezed out of this market. However, I would be VERY surprised if that all time had any notable follow-through. The market volume on the macro levels has steadily declined, and there are key market indicators that hint toward the need for sustained sideways consolidation. Alternatively, a strong market pullback might be in the cards for BTC-USD. Each push toward the new highs has been greeted by strong sell volume. In the event of a market retracement, your key support levels on the macro exist along the Fibonacci Retracements shown below:

Figure 5: BTC-USD, 4-Hour Candles, Bitfinex, Key Support Levels

When the market begins to struggle to push new all-time highs, it is important to keep a close eye on the volume and see how it interacts with the price movement. Consistent price growth on decreasing buy volume is a signal that the bears, although losing the battle in price currently, are gathering as the market nears its final top before ultimately correcting or consolidating. And given the price growth over the past 30 days, I would be inclined to lean toward the former rather than the latter.

Summary:

Short squeezes and long squeezes have begun to shape the current market trend.

On the macro and micro scale, the market is showing a highly overbought market and is beginning to lose upward steam.

Key support levels lie on the Fibonacci Retracements shown in Figure 5.

Trading and investing in digital assets like bitcoin, bitcoin cash and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

On August 9, IBM announced the firm’s cooperation with Sony Global Education — a subsidiary of Sony, providing global educational services — with the objective to develop a learning platform for students implementing blockchain technology.

According to IBM, the blockchain-based educational platform would allow school administrators to manage and consolidate the educational data of students at multiple schools in addition to recording and referring their “learning history and digital academic transcripts with more certainty.” The platform will use the IBM Blockchain, which is based on the IBM Cloud, to establish “transparency and accountability of scholastic achievements between students and schools,” allowing both professors and students to track the latter’s learning progress.

The tech giant pointed out that it is often difficult for employers to verify student records of potential hires. According to IBM, there are multiple reasons for this issue, including students taking online courses and attending universities abroad. Such “non-traditional methods” can create confusion for the employers; however, IBM believes implementing blockchain technology will resolve the issue. The learning platform will give both the teachers and the students a digital, trusted record showing their accomplishments, which can be — thanks to the nature of blockchain technology — easily verified by future employers or educational institutions.

“Blockchain technology has the potential to impact systems in a wide variety of industries, and the educational sphere is no exception when educational data is securely stored on the blockchain and shared among permissioned users. We are pleased that we have worked together with IBM to build a new system which can help effect real change in the education sector,” Masaaki Isozu, President of Sony Global Education, said in a statement.

The system’s work is simple: student data will be recorded by the platform and shared with “need-to-know parties,” including future employers and school administrators. Since the learning platform will be using the IBM Blockchain, every piece of data can be verified by the parties.

Schools, colleges and universities can also share the data to help teachers identify and implement unique teaching methods for each student based on the information on the blockchain. The learning platform will also collect all related information and place it in a single repository, which will allow the reliable sharing of digital transcripts. Students will be able to create certain networks on the blockchain, which can’t be altered or changed by any party.

In addition, the platform will help specific vendors target offerings based on verified needs. Representatives from IBM Japan confirmed to Bitcoin Magazine that these vendors include private preparatory schools and cram schools (institutions specialized in training students to reach certain goals). The only data provided to the vendors are the study results of the students. The students or their parents will maintain access control for the students’ study results.

“Blockchain [technology] offers a new approach to how the lifetime history of data related to a person, place or thing is shared and managed. In effect, data tracked on a blockchain becomes a single source of truth. We are delighted to have supported Sony Corporation and Sony Global Education to build up a new blockchain-based platform for innovations in education,” said Yoshiki Minowa, Vice President and partner of Cognitive Process Transformation, Global Business Services, IBM Japan.

The platform will be powered by Hyperledger Fabric 1.0, a blockchain framework and one of the Hyperledger projects hosted by The Linux Foundation.

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Presearch, a software development startup specializing in information search engines, is challenging Google on its own turf with a double-barreled approach, using both blockchain technology and AI.

Presearch’s search engine, already in use internally since 2013, is launching in beta this September. Blockchain technology and AI will be supplemented with curation by subject matter experts.

Founder and project lead Colin Pape, who previously launched the e-commerce site ShopCity.com, said:

“While Google is generally thought of as a neutral entity for search, the company answers to Wall Street and operates very secretively.

“They’ve become known for promoting themselves at the expense of alternatives and appropriating others’ information, blaming it on ‘the algorithm.’ The reality is that they manipulate results and justify changes as being best for the user.”

Pape wants to provide a community-driven, decentralized, open and transparent alternative to Google, in contrast to what he calls the “manipulated algorithm-driven methods standard among today’s industry giants.”

Pape told Bitcoin Magazine:

“Presearch will use a combination of human curation by subject matter experts who are rewarded with tokens, and machine learning technology and APIs from other search providers (particularly for long-tail searches).”

Pape told us they will be using the Ethereum Blockchain ERC20 standard to start but may build their own blockchain technology at some point down the road.

Openness, Accountability and Community Participation

The company’s white paper emphasizes that never in the history of the world has so much information been concentrated in so few hands. It also points out that Google makes $100 billion in annual revenue from search engine searches.

Presearch estimates that 77 percent of global desktop searches and 96 percent of mobile searches, more than 5 billion queries per day, go to Google.

The white paper states that Google has built up an unprecedented degree of trust with users with “their simple interfaces, lightning-fast response times and utter reliability, combined with what appear to be amazingly accurate results.”

A Search Engine Wikipedia

Presearch believes that a decentralized, community-based decision-making process ensures everyone’s interests are considered. By rewarding members for using, promoting and contributing to the Presearch platform, the company wants to create a scalable “Wikipedia for search” to allow members to curate the best content for each inquiry.

The Presearch community can also vote on and fund new development projects, continually upgrading the platform.

Pape added: “With Presearch, I wanted to flip that business model on its head and put power over information back into the hands of all internet users.”

Search is the gateway to the web. The world deserves an alternative search engine that is open, transparent, and that involves the community in product development, consensus and quality control.

Funding

Presearch’s curation and overall development of the platform is incentivized with the Presearch Token (PST).

Presearch has run three separate crowd sales for $1 million, $1.5 million and $3 million in token revenue. There are three more sales to go that are targeted to generate more than $30 million in total revenue.

The startup is headquartered in Midland, north of Toronto, Canada. A “distributed” team is located in Silicon Valley, Boulder, Colorado and the Atlanta area, and the company is planning to expand internationally.

Advisors to Presearch include internet innovator, Rich Skrenta, who sold his search engine Blekko to IBM Watson; open-source search innovator Trey Grainger, SVP of Engineering at Lucidworks; and technology lawyer Addison Cameron-Huff, whose experience includes working with Ethereum’s founding team.

Bitcoin Magazine contacted Google for comment but has not yet received a response.

New York-based decentralized internet and developer platform Blockstack has partnered with a number of venture capital groups to launch the $25 million Blockstack Signature fund.

The Blockstack Signature fund is backed by Lux, OpenOcean, VersionOne, RisingTide, and Compound, and funding will go toward apps being built in the Blockstack ecosystem.

Patrick Stanley, growth partner at Blockstack, explained to Bitcoin Magazine that “Blockstack is not launching the VC fund but facilitating.” That is, the company’s role in the fund has been to gather the venture capital groups, attract the developers and facilitate the partnerships that will result in quality app development on the Blockstack platform.

According to Blockstack, the VC fund will dedicated to “rapidly accelerating startups building decentralized applications on the platform, and tools for developers to bootstrap their apps, with tokens on the Blockstack network — just like you see with Ethereum.”

Muneeb Ali, co-founder at Blockstack, told Bitcoin Magazine: “We are at a stage where some of the developers are incredibly excited about building apps and usually get in touch with us. If developers get in touch with us with an app that they are excited about, this is one funding channel we can point them to.”

Ali added: “The VCs involved in the fund will take a look at that application and make a independent decision to fund that company or now. Our intention here is to bring together sophisticated investors, people who have been thinking a lot about decentralization and can do their due diligence.”

VC investing is a type of private equity, a form of financing that is provided by firms or funds to small, early-stage, emerging firms that are deemed to have high-growth potential, or which have demonstrated high growth in terms of number of employees, annual revenue or both.

Ali explains: “If you look at this space in general we feel that there are a lot of low quality apps which are raising an insane amount of capital from token sales, for example. We want to bring some quality and sanity to the picture. We feel that VCs can still have a seat at the table … we want to open up that channel as well.”

Blockstack was formerly known as Onename and passed through its young company status in the summer of 2014 as a startup looking to streamline bitcoin transactions.

On August 14, the Enterprise Ethereum Alliance announced the addition of more than a dozen organizations to its blockchain collaboration under the umbrella of its Legal Industry Working Group, responsible for creating enterprise-grade applications on the Ethereum blockchain. The new members include law schools, legal departments of universities, academic institutions and leading global law firms.

According to the EEA, the swift expansion of the Legal Industry Working Group is due to the fact that an increased number of legal professionals are showing interest in blockchain technology. The Ethereum blockchain consortium believes this working group will serve as a base for the success of “various efforts taking place within the organization.”

“We are thrilled to see robust interest in blockchain technology by forward-looking law firms and institutions. Lawyers are poised to serve as the catalysts for blockchain technology, and the Legal Working Group will serve as a neutral space to explore blockchain-based legal technology, develop standards for “smart” legal agreements, support emerging enterprise use cases and tackle important policy issues raised by this new impactful technology,” Aaron Wright, Chair of the EEA Legal Industry Working Group, Associate Clinical Professor and Co-Director of the Cardozo Law School’s Blockchain Project, and co-founder of the smart contract project OpenLaw, said in a statement.

The Legal Industry Working Group isn’t the only part of the blockchain collaboration to be experiencing a rapid growth in new members. On July 18, 2017, the EEA announced that the alliance had onboarded 34 new organizations, bringing the number of the participants to more than 150 members. The newly joined participants included Mastercard, Cisco, the Government of Andhra Pradesh (one of the 29 states of India), Scotiabank and many others.

Formed in late February 2017 by founding members such as Intel and J.P. Morgan, the EEA strives to create, promote and support open standards, best practices and open source reference architectures on the Ethereum blockchain. The consortium serves as the major research and development body of the Ethereum blockchain, helping Ethereum to evolve into an enterprise-grade technology. In terms of development and research, the EEA focuses on multiple areas, including privacy, confidentiality, scalability and security, as well as investigating hybrid architectures and industry-specific, application-layer working groups.

While many fear BTC-USD is entering bubble territory, others are calling for even higher price targets. Politics aside, there is a clear push for higher BTC-USD prices and it’s creating market uncertainty.

Here are the facts:

30 days ago, BTC-USD was $1800.

Today the price of BTC-USD has risen 130% and has managed to establish an all time high at $4300.

In 5 days alone, the price of BTC-USD has increased its market value by 30%.

Taking a look at the macro trend since the rise post-$1800s, we see clear lines of support along the Fibonacci Retracements:

Figure 1: BTC-USD, 6-Hour Candles, Bitfinex, Macro Fib. Lines

Across the length of the bullish push from the $2700s (the 61% line) there are signs of sustained momentum in the RSI and MACD. Looking at the volume profile, there is no clear decline in volume and it appears to show market interest in higher values as the volume’s moving average has remained mostly flat. However, since the bullish push from the $3200s (the 38% line) we can see signs of bullish exhaustion in the form MACD and RSI divergence.

Zooming in on a smaller timescale, we see evidence of a higher push to new all time highs:

At the top of BTC-USD’s strong run from the $3200s stands a classic bullish continuation pattern called a “Bull Pennant.” The pennant is characterized by price consolidation within a convergent pattern and has decreasing volume throughout the length of the pennant body. To accompany this pattern is a 1-hour RSI and MACD that began to consolidate toward its centerline.

At the time of this article, BTC-USD appears to have broken out of this pennant with a sharp increase in volume. Currently, based on typical price projections for Bull Pennant breakouts, this pennant breakout has a price target of $5000.

Although this is a rather aggressive price target for this bull pennant, there are some considerations on a macro scale that should be addressed and discussed.

Figure 3: BTC-USD, 1 Day Candles, Bitfinex, Bollinger Bands

For the fourth day in a row, BTC-USD continues to push outside the Bollinger Bands. Historically, this sort of push has led to market pullback or consolidation. Even on high timescales, the current 3-day candle (not shown above) is fully formed outside the Bollinger Bands and shows, on a macro scale, that the market is overbought. To accompany this push of the Bollinger Bands, a clear decrease in volume is seen on the moving average that shows, since the rise from $1800s, there has been waning bullish sentiment.

While there is a lot of hype surrounding BTC’s recent rise, it is paramount to remain objective and skeptical of market activity and to view the market soberly. The price target of $5000, on a micro level seems plausible. However, on a macro level the bullish market appears to have slightly bearish divergence. To remain a reliable price target, the market needs to see a push to newer all time highs accompanied by increase in volume to sustain the next $800 of price movement.

Summary:

BTC-USD has broken out of a bullish continuation pattern called a “Bull Pennant” with a price target of $5,000.

On a macro scale, there are signs of bullish momentum loss in the form of bearish divergence and overbought signals on the Bollinger Bands.

While the market can remain overbought for days and weeks, it’s important to keep in mind that the higher the market pushes into overbought zones, the more necessary market consolidation becomes in order to prevent a market pullback. So far, there has yet to be any considerable market consolidation during this 130% rise.

Trading and investing in digital assets like bitcoin, bitcoin cash and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

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